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Long Weekends

May 27, 2011 – 4:58 pm

The economic numbers released this morning were mixed with pending home sales for April down sharply which was much more than expected, however consumer sentiment for May was much better than expected and personal income was in line with expectations.

The home sales number put a little pressure downward when it came out but the market remained in positive territory in the first half hour of trading. Next week’s jobs report coming in on Friday will be the focus from this point onward. Without increasing jobs the housing market will not improve.

Being the last day of the month for trading and the beginning of a three day weekend the market is likely to find some strength. There was a recent article that studied the market a few days before and after a three day weekend and found that there is a strong tendency for the market to rise. If the three day weekend is also the last trading day of the month the trend of rising stock prices is stronger. This surprised me as I have always assumed that traders feared the long weekend with no access to exit the market but instead the numbers show that they fear missing an opportunity more than they do a falling market.

For the rest of us that are not short term traders a long weekend should not matter. It is far more productive to focus on the direction of the economy and the subsequent earnings power of the individual stocks.

Good Trading
Steve Peasley

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